Eagle Ford's economic boom touted

By Vicki Vaughan :
April 18, 2012
: Updated: April 18, 2012 8:20pm

METRO -- Floorhand, Draden Copepland, cleans a filter on a drilling rig at a site near Carriso Springs on a well owned by Chesapeake Energy, Thursday, April 5, 2012. Jerry Lara/San Antonio Express-News

Photo By Jerry Lara/San Antonio Express-News

METRO -- Oilfield workers drill at a site near Carriso Springs at a well owned by Chesapeake Energy, Thursday, April 5, 2012. Jerry Lara/San Antonio Express-News

Photo By Jerry Lara/San Antonio Express-News

Oil-field workers drill at a site near Carriso Springs at a well owned by Chesapeake Energy in this file photo. September's jobs report showed that the sector that includes oil and gas production had the state’s highest seasonally adjusted growth rate of 9.6 percent.

Photo By JERRY LARA/Jerry Lara

METRO -- Workers unload crude oil from tanker truck into railroad tankers at the Gardendale Railroad Inc. switching yard near Cotulla, Texas, Thursday, April 5, 2012. At one time, the Gardendale Railroad line ran between Uvalde to Corpus Christi before it was abandoned decades ago. Reduced to a single abandoned spur off the Union Pacific mainline, in less than three years, it has become a large rail interchange in the Eagle Ford Shale play. Sand and pipe are brought into the play while crude oil is shipped out. Jerry Lara/San Antonio Express-News

GONZALES — The development of the Eagle Ford Shale continues to transform South Texas as production from the vast oil and gas play has surpassed forecasts, members of the Eagle Ford task force were told in a meeting Wednesday.

Just in Carrizo Springs, the sales tax returned in March alone totaled more than $500,000. Paula Seydel, manager of the Dimmit County Chamber of Commerce, said it's a thrill that new small business are opening or expanding in once-dying downtowns.

The shale development, she said, “is the answer to a prayer, the answer to a dream.”

Overall, the oil and gas industry is making strong contributions to the state's coffers, too.

The industry paid $508 million in franchise taxes in fiscal 2011, or almost 13 percent of total franchise taxes paid, said Robert Wood, director of local government assistance and economic development at the Texas comptroller's office.

Also, severance taxes paid by the industry sent $1.1 billion to the state's rainy day fund in November, he said. Deposits in the fund are made annually in that month.

Railroad Commissioner David Porter, who founded the 24-member task force last year, said the numbers reinforce his view that the Eagle Ford might be the state's biggest economic engine ever.

And the shale is helping boost employment in the state's oil and gas industry.

“We're above where we were at the peak in 2008,” Wood said.

Statewide, employment in all industries in Texas rose 2 percent in 2011, compared with 2010. Employment in the oil and gas industry jumped 18 percent in the same period, and the average annual salary was $117,000, Wood said.

The task force also heard from Thomas Tunstall, who showed members an April 2009 map of U.S. shale plays from the Energy Department. The Eagle Ford isn't on it.

He presented figures that he'd earlier shared with a meeting of the Eagle Ford Consortium, saying the shale development has far surpassed the institute's estimates. The institute estimated that the shale would produce 2.1 million barrels of oil in 2010. Instead, the shale produced 4.4 million in the first 11 months of that year.

For 2011, production of 8.7 million barrels of oil was forecast. Almost 22 million were pumped out in 2011's January-November period.

The institute made no forecast for how much condensate — a valuable product similar to light crude oils — would be produced in 2010, but it estimated that production would reach 5.6 million barrels in 2011. Actual production was almost 19 million.

The institute will update its 2011 economic impact study of the shale May 9 in San Antonio, Tunstall said. The study will look at the effects of the shale development in 14 counties of South Texas, as well as examine the impact in six secondary counties, including Bexar.

Seydel recently interviewed several Dimmit County students who are applying for scholarships.

“For the first time in years, we have smart kids looking at becoming petroleum engineers, with the possibility that they can get jobs right in their hometowns. They're interested in becoming diesel mechanics, electricians and welders. And thinking they can stay near their family.”